AI specialty gas tightness drives China’s best-performing A-Share in H1

Key takeaways:

• AI-driven semiconductor growth is boosting demand for WF6, a critical process gas used in advanced memory and logic chip manufacturing.
• China’s tungsten export controls have tightened global supply chains, raising feedstock costs and strengthening the position of Chinese specialty gas producers.
• Investors increasingly view WF6 as a strategic semiconductor material, making specialty gas stocks a barometer for supply-chain stress in the AI chip sector.

China specialty gas stocks surge on AI semiconductor demand

Among the clearest market beneficiaries has been China’s specialty gas sector. Peric Special Gases became the best-performing stock in the A-share market in the first half of 2026 after rallying by more than 730%, according to data from the Shanghai Stock Exchange.

The surge reflects growing investor attention on potential bottlenecks in upstream materials supporting AI-related semiconductor production, particularly high-purity tungsten-based process gases such as WF6.

WF6 is a critical deposition gas used in advanced semiconductor manufacturing, including 3D NAND memory and leading-edge logic chips, where it enables tungsten deposition in high-aspect-ratio structures.

The rally in Peric Special Gases has been accompanied by broader gains across China’s specialty gas and semiconductor materials sector, suggesting a wider market re-rating driven by supply-chain tightness rather than a single-stock momentum trade. Other major players, including Haohua Gas and GrandiT, have also posted strong gains.

“The market value of our company increased by 250%, from 4 billion yuan ($589 million) to 14 billion yuan, in the first half of 2026,” said Ming Peng, general manager of Hubei Heyuan Gas, another major WF6 producer in China.

“The spot price of WF6 has risen from around 300,000 yuan ($44,000) per tonne to 1.5 million yuan per tonne since the beginning of this year,” Peng added.

Export controls tighten the market

According to Peng, the bullish sentiment has been largely driven by China’s export controls on tungsten-related raw materials, which have sharply increased production costs for WF6 manufacturers outside China.

Kanto Denka Kogyo, one of Japan’s leading WF6 producers, recently identified tungsten as one of the raw materials weighing on profitability. In its latest financial results, the company repeatedly highlighted tungsten among the key cost pressures affecting operating profit.

The company expects the negative impact from raw-material and fuel costs to widen sharply from ¥0.3 billion yen in fiscal year 2025 to ¥15.66 billion yen in fiscal year 2026, suggesting management anticipates substantially higher input-cost pressure going forward.

Fastmarkets’ weekly price assessment for tungsten APT, 88.5% WO3 min, fob main ports China, was $2,600-3,200 per metric tonne unit (mtu) on July 1, up around 600% from $410 per mtu a year earlier.

Want to know what’s ahead in the tungsten market? Access the Fastmarkets ores and alloys short-term forecasts to stay ahead.

Global WF6 supply remains highly concentrated

Global WF6 supply is highly concentrated among a small group of producers in Japan, South Korea and China.

Japan remains one of the largest suppliers, led by Kanto Denka Kogyo and Central Glass, which together are estimated to account for roughly 20-30% of global production capacity.

South Korea, primarily represented by SK Materials, contributes an estimated 15-25% of global output, supported by strong demand from domestic semiconductor manufacturers, including Samsung Electronics and SK Hynix.

China’s share has expanded rapidly in recent years, driven by producers such as subsidiaries of China State Shipbuilding Corporation and other domestic suppliers. The country is estimated to account for approximately 25-35% of global capacity, with additional electronic-grade WF6 projects continuing to come onstream.

China’s tungsten dominance creates a supply-chain advantage

Despite this growing production base, the global WF6 industry remains heavily dependent on China for upstream feedstocks, particularly high-purity tungsten powder. China dominates global tungsten mining, ammonium paratungstate (APT) production, and refined tungsten powder supply.

In February 2025, China added several tungsten-related products to its export control list, citing national security and industrial security concerns. A year later, Beijing further strengthened controls on dual-use items.

Under the regulations, exports of dual-use goods are prohibited when destined for military end-users, military end-uses, or recipients that could contribute to enhancing Japan’s military capabilities.

As a result, China’s exports of high-purity tungsten powder to Japan fell to zero for three consecutive months between February and April 2026, according to Chinese customs data.

Demand continues to rise despite feedstock constraints

At the same time, demand for WF6 continued to strengthen amid growing investment in AI-related semiconductor production.

Kanto Denka Kogyo reported higher tungsten hexafluoride sales, supported by both price increases and higher shipment volumes, according to its latest financial results.

“The government imposed export controls on tungsten-related raw materials, but WF6, as a downstream processed product, was not included on the dual-use control list, meaning exports of the specialty gas can continue,” a source familiar with the matter said.

According to Chinese customs data, China exported 210.9 tonnes of tungsten hexafluoride during January-May 2026, with a total value of 197.1 million yuan.

Shipments to Japan totaled 28.02 tonnes, worth 28.8 million yuan, accounting for 13.3% of China’s WF6 exports by volume and 14.6% by value over the period.

WF6 becomes a key AI supply-chain indicator

“Global demand for tungsten specialty gases used in chipmaking is rising rapidly, but the market remains highly opaque,” a China-based tungsten producer said.

“In the absence of a transparent global pricing benchmark for semiconductor-grade WF6, investors have increasingly used China’s listed specialty gas producers as indirect indicators of underlying market conditions,” a trader in the specialty gas sector said.

“Peric Special Gases’ sharp rally reflects not only company-specific fundamentals but also broader expectations of tightening WF6 availability and mounting constraints in upstream tungsten feedstocks,” the trader added.

“As a result, the stock has become a widely watched barometer of supply stress across AI-related semiconductor materials, rather than simply a reflection of traditional industrial gas demand cycles.”

With tungsten feedstocks increasingly constrained while AI-related semiconductor production continues to expand, market participants expect WF6 to remain one of the most closely watched niche materials in the global semiconductor supply chain.

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